Birmingham City look to have lost their battle to keep Dave Watson at the club.

The goalkeeper coach is poised to join Norwich City and link up with Chris Hughton. The move should be finalised this week after Watson held talks with the Carrow Road club.

Norwich told Blues they were prepared to meet the compensation clause that would extract Watson from his contract.

And the 38-year-old didn’t reject the opportunity to speak to the Canaries. Watson joined Blues from Nottingham Forest in January 2008 and has just returned from Euro 2012 with England.

Whether he continues his role with the national team on a part-time basis remains to be seen. New Blues manager Lee Clark went on record saying he wanted Watson to stay at the club. But it appears that after thinking over the switch, Watson has decided to throw in his lot with Norwich.

Clark, therefore, has to seek a replacement. Contrary to reports, no formal approach has yet been made yet to any club for their goalkeeper coach.

Chesterfield’s Mark Crossley has been linked with Blues. He was a team-mate of Clark’s at Fulham and has been at Chesterfield for three years. Huddersfield Town’s John Vaughan could also come into Clark’s thinking. Watson’s exit will naturally spark fears of the possible impact on Jack Butland. Like Joe Hart and Ben Foster before him, Butland is a massive fan of Watson’s.

He has credited him with playing a major part in his development so far. But Peter Pannu has insisted that Butland is staying and surprised many in football by rejecting a £6million offer for the teenager, who has yet to make his Blues debut, from Southampton. Butland has been earmarked to take over the No.1 jersey next season at Blues.